Despite the fact that the larger part of the cryptocurrency market is mostly covered in red, one prominent altcoin seems to stand out.
Ripple’s XRP price is soaring in the past few days, and it shows no signs of slowing down. The coin is up around 12% on the weekly and has conquered an important level – that of $0.6. So, without any further ado, here are a couple of reasons why that might be.
The SEC Chances Growing Slimmer?
While there’s no new breakthrough in the case against the Securities and Exchange Commission of the United States, it appears that investors are starting to price in the potential for a victory.
Recall that a couple of weeks back, Judge Analisa Torres denied the SEC’s request to seal documents pertaining to a speech by the former director of the agency’s corporate finance division – Bill Hinman.
This has apparently had many people thinking that the case is close to its end. Charles Hoskinson – the founder of Cardano – is among them. He believes that the case will get resolved in June.
XRP Bulls Getting Excited
It also appears that investors are preparing for a potential uptick in the price of XRP on leveraged exchanges.
Data from the popular analytics resource, CoinGlass, shows that the ratio between long and short positions over the past day has spiked above 1. This is true for most of the major cryptocurrency exchanges that support leveraged trading.
In essence, this indicates that long positions are dominating and that there are more buyers than sellers at the moment.
However, this could also raise some concerns. Leveraged positions are liquidated once the collateral posted for them is not enough to cover the trade. In other words, they are force-closed. And the way closure works is – long positions get sold, while short positions get bought. This is capable of causing the so-called squeezes.
When the price starts moving aggressively against the predominant sentiment (in this case – bullish), this causes a cascade of long liquidations (read: sold positions), which add more fuel to the fire.
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